Sydney’s Sofitel Wentworth closes in on Singapore sale
Singapore’s acquisitive Royal Group Holdings is in exclusive due diligence to buy one of the last dowager hotels of Sydney, the landmark Sofitel Wentworth, in the largest hotel deal of the year.
Royal chairman Asok Kumar Hiranandani and son Bobby are no strangers to Sydney’s tightly held hotel market, having previously owned the Ritz Carlton Double Bay.
They now appear keen to take on the CBD and are looking to buy the 436-room Sofitel Wentworth for more than $300 million.
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The hotel faces stiff competition due to the swag of new hotels being developed and opened across Sydney.
These include Grocon’s $700 million development at Darling Harbour and Crown’s $2.2 billion project at Barangaroo.
The move by Singapore’s Frasers Hospitality Trust to sell the historic Sofitel Wentworth, which was touted as being worth more than $400 million at one stage, comes during a busy period when more than $1 billion worth of hotels were expected to change hands.
But deals have been harder to seal this year and some new hotels are less likely to go ahead. In one example, Dexus and the private Perron Group shelved plans for an opulent hotel and apartment tower on Hyde Park but property funds group Charter Hall is now buying that property and will keep it as an office building.
The Sofitel Sydney Wentworth, which sits in the heart of Sydney’s CBD, was picked up by Frasers Centrepoint in 2014 for $202.7 million from US group LaSalle Investment Management and was shifted into its Singapore-listed hotel real estate investment trust.
The long-running marketing campaign by JLL was the first significant test of the city’s hospitality market for years as no luxury five-star CBD hotels have traded since a rush of Chinese purchases five years ago, when they swooped on the Sheraton on the Park, the Hilton and Westin Sydney.
– with Lisa Allen
This article originally appeared on www.theaustralian.com.au/property.